JAPAN's "K" Line is to focus on growing its non-container business in the areas of LNG, bulk and car transport, as well as to cut costs to maintain the viability of its struggling container shipping business.
The company's annual report shows the company made a profit of US$161.7 million for the fiscal year through March 2014 but its container business only just broke even, with just 47.6 per cent of the line's revenue generated from its container transportation business.
"In terms of businesses that contribute to a more stable earnings structure, "K" Line has particular strength in dry bulk carriers, car carriers and LNG carriers. We hope to make these particular areas even stronger,," said CEO Jiro Asakura, reported London's Container Management.
"Stable earnings are generated by businesses in which we can expect a certain level of earnings for a certain period," he said in the company's annual report.
The shipping line currently operates 74 container vessels with a combined capacity of 350,000 TEU.
By joining the CKYHE Alliance along with COSCO, Yang Ming, Hanjin and Evergreen, "K" Line would be able to tap the alliance's combined capacity of 3.2 million TEU deployed on the east-west trades, representing 16.7 per cent of global capacity, based on data from Alphaliner.
"K" Line will also add five 14,000-TEU ships to its fleet next year, with another five scheduled for delivery by 2018, which is expected to lower costs per TEU. Meanwhile it will focus on reefer transport and other segments to improve overall profitability.
In 2013-14 its container cargo volumes grew by four per cent on North American and European routes.
As a part of the strategy to expand its logistics business further in Asia, the Japanese shipping line has agreed to establish a joint venture with Cool Japan Fund Inc. and Japan Logistic Systems Corp, and to construct and operate a cold storage facility on the outskirts of Ho Chi Minh City.
The new facility will have a total floor area of 9,300 square metres occupying a 20,000-square metre site.
Source : HKSG, 06.10.14.